HCFA analysis could cause real harm
HCFA analysis could cause real harm
Clock ticking fast toward Jan. 1 sea change
Cardiologists are predicted to be hit hard if new Medicare practice expense values are implemented, and when those pocketbooks are socked, cardiovascular units can’t be far behind. According to an impact analysis by the Health Care Financing Administration (HCFA) in Washington, 1998 Medicare reimbursement for cardiology services could decrease 20% to 25% on Jan. 1. For cardiac surgical procedures, that decrease is projected to be 32% to 44%.
The issue of practice-expense payments in the Medicare Part B formula known as Resource-Based Relative Value Scale (RBRVS) represents a sea change. The Social Security Amendments of 1994 mandate that a new system be implemented Jan. 1, 1998, and unless the freight train proposed by HCFA is derailed, cardiologists stand to experience severe cuts. The changes affecting cardiovascular services mostly include the reductions in payments for echocardiography, exercise stress testing, and hospital visits and consultations. (See chart, p. 76.)
The American College of Cardiology (ACC) in Bethesda, MD, adamantly opposes the mandated Jan. 1 implementation date and advocates that Congress reevaluate how to achieve the goals of its practice-expense project. The college considers valuing the practice-expense component of the Medicare fee schedule a top priority and has been working hard on devising a reasonable approach to incorporating practice expense into the RBRVS.
Totally unacceptable’ to ACC
"HCFA needs to go back to the drawing board on its methodology," says Karen Collishaw, a policy analyst and director of federal and state affairs with the ACC. "The proposed cut in total reimbursement to cardiovascular specialists is twice that predicted by other studies and is, therefore, totally unacceptable. The College, along with more than 30 other organizations that comprise the practice-expense coalition, is working hard with Congress to ensure that the current proposal is not implemented Jan. 1."
The American Medical Association (AMA) in Chicago also is lobbying aggressively for extension of the current Jan. 1 deadline, according to James Stacey, director of the division of information services for the AMA. "The association is urging Congress to come up with a more scientific formula evaluating practice expenses," he says.
P. John Seward, MD, AMA executive vice president, wrote in a March 12 memo to specialty society presidents that the AMA will ask that HCFA work with physician groups to collect and utilize actual practice cost data in constructing new practice-expense values. The memo points out numerous errors in the data collected by HCFA, as does Seward’s letter to Bruce Vladeck, PhD, administrator of HCFA. In the Feb. 4 letter he expressed grave concerns about the RBRVS and stated, "The resource-based practice expense relative values should be based on data generated by actual resources involved in the provision of physician services. With national data showing that practice expenses account for 41% of total physician revenues and therefore 41% of total Medicare relative values, it is inconceivable that a sound practice expense methodology using valid data could produce payment reductions of greater than 40% for a number of specialties. . . . We strongly urge HCFA to explore new methods of allocating indirect costs that bear more of a relationship to actual practice expenses."
RBRVS is Medicare’s payment schedule for physicians and typically forms the basis for calculating private sector discounted fee-for-service and capitation payment amounts. The fee schedule has historically been based on physician charges rather than actual practice expenses. In its 1993 annual report to Congress, the Physician Payment Review Commission recommended a major redistribution of Medicare expenditures. In 1994, Congress mandated the establishment of resource-based practice-expense relative value units (RVU) for Medicare.
HCFA began its practice-expense project in December 1995. Collaborating with cardiology specialty societies, the agency sought to identify independent practice expenses for key cardiovascular services. The ACC’s objections to HCFA-commissioned studies are based on claims that HCFA’s methodology is flawed and consequent practice expense RVUs are distorted. "For example," states an article in the College’s March issue of Cardiology, "9.7 RVUs are proposed for the technical component of 78461, myocardial perfusion imaging, multiple studies using planar methods, but for the technical component of 78465, multiple SPECT studies, 9 RVUs are proposed. Such notable errors have created distrust of the entire process."
Early this year HCFA released to specialty medical societies preliminary data on its plans to calculate new resource-based practice-expense relative values under the Medicare fee schedule. At that time, HCFA officials predicted release of their notice of proposed rule making in the May 1 Federal Register. As Cost Management in Cardiac Care goes to press, HCFA is expected to publish the notice in late June.
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